FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2014

FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis

June 30, 2014							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting(a)	Collateral			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	24	$	2,801	$	-	$	-	$	-	$	2,825
Obligations of states, municipalities and political subdivisions		-		27,731		1,991		-		-		29,722
Non-U.S. governments		604		21,551		25		-		-		22,180
Corporate debt		-		147,560		2,196		-		-		149,756
RMBS		-		21,363		16,328		-		-		37,691
CMBS		-		6,477		5,917		-		-		12,394
CDO/ABS		-		4,305		7,431		-		-		11,736
Total bonds available for sale		628		231,788		33,888		-		-		266,304
Other bond securities:
U.S. government and government sponsored entities		89		5,291		-		-		-		5,380
Obligations of states, municipalities and political subdivisions		-		123		-		-		-		123
Non-U.S. governments		-		2		-		-		-		2
Corporate debt		-		1,055		-		-		-		1,055
RMBS		-		1,216		1,062		-		-		2,278
CMBS		-		553		757		-		-		1,310
CDO/ABS		-		2,885		8,397		-		-		11,282
Total other bond securities		89		11,125		10,216		-		-		21,430
Equity securities available for sale:
Common stock		3,253		2		-		-		-		3,255
Preferred stock		-		28		-		-		-		28
Mutual funds		763		2		-		-		-		765
Total equity securities available for sale		4,016		32		-		-		-		4,048
Other equity securities		653		71		-		-		-		724
Mortgage and other loans receivable		-		-		6		-		-		6
Other invested assets		25		3,020		5,824		-		-		8,869
Derivative assets:
Interest rate contracts(b)		16		2,890		23		-		-		2,929
Foreign exchange contracts(b)		-		1,089		14		-		-		1,103
Equity contracts		110		22		93		-		-		225
Commodity contracts		-		-		1		-		-		1
Credit contracts		-		-		41		-		-		41
Other contracts		-		-		37		-		-		37
Counterparty netting and cash collateral		-		-		-		(1,801)		(918)		(2,719)
Total derivative assets		126		4,001		209		(1,801)		(918)		1,617
Short-term investments		595		3,715		-		-		-		4,310
Separate account assets		72,986		2,732		-		-		-		75,718
Other assets		-		-		-		-		-		-
Total	$	79,118	$	256,484	$	50,143	$	(1,801)	$	(918)	$	383,026
Liabilities:
Policyholder contract deposits	$	-	$	56	$	842	$	-	$	-	$	898
Other policyholder funds		-		8		-		-		-		8
Derivative liabilities:
Interest rate contracts(b)		-		2,589		90		-		-		2,679
Foreign exchange contracts(b)		-		1,525		23		-		-		1,548
Equity contracts		1		93		2		-		-		96
Commodity contracts		-		4		-		-		-		4
Credit contracts		-		-		1,126		-		-		1,126
Other contracts		-		-		90		-		-		90
Counterparty netting and cash collateral		-		-		-		(1,801)		(1,326)		(3,127)
Total derivative liabilities		1		4,211		1,331		(1,801)		(1,326)		2,416
Long-term debt		-		5,430		394		-		-		5,824
Other liabilities		208		361		-		-		-		569
Total	$	209	$	10,066	$	2,567	$	(1,801)	$	(1,326)	$	9,715

December 31, 2013							Counterparty		Cash
(in millions)		Level 1		Level 2		Level 3		Netting(a)	Collateral			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	133	$	3,062	$	-	$	-	$	-	$	3,195
Obligations of states, municipalities and political subdivisions		-		28,300		1,080		-		-		29,380
Non-U.S. governments		508		21,985		16		-		-		22,509
Corporate debt		-		143,297		1,255		-		-		144,552
RMBS		-		21,207		14,941		-		-		36,148
CMBS		-		5,747		5,735		-		-		11,482
CDO/ABS		-		4,034		6,974		-		-		11,008
Total bonds available for sale		641		227,632		30,001		-		-		258,274
Other bond securities:
U.S. government and government sponsored entities		78		5,645		-		-		-		5,723
Obligations of states, municipalities and political subdivisions		-		121		-		-		-		121
Non-U.S. governments		-		2		-		-		-		2
Corporate debt		-		1,169		-		-		-		1,169
RMBS		-		1,326		937		-		-		2,263
CMBS		-		509		844		-		-		1,353
CDO/ABS		-		3,158		8,834		-		-		11,992
Total other bond securities		78		11,930		10,615		-		-		22,623
Equity securities available for sale:
Common stock		3,218		-		1		-		-		3,219
Preferred stock		-		27		-		-		-		27
Mutual funds		408		2		-		-		-		410
Total equity securities available for sale		3,626		29		1		-		-		3,656
Other equity securities		750		84		-		-		-		834
Mortgage and other loans receivable		-		-		-		-		-		-
Other invested assets		1		2,667		5,930		-		-		8,598
Derivative assets:
Interest rate contracts		14		3,716		41		-		-		3,771
Foreign exchange contracts		-		52		-		-		-		52
Equity contracts		151		106		49		-		-		306
Commodity contracts		-		-		1		-		-		1
Credit contracts		-		-		55		-		-		55
Other contracts		-		1		33		-		-		34
Counterparty netting and cash collateral		-		-		-		(1,734)		(820)		(2,554)
Total derivative assets		165		3,875		179		(1,734)		(820)		1,665
Short-term investments		332		5,981		-		-		-		6,313
Separate account assets		67,708		3,351		-		-		-		71,059
Other assets		-		418		-		-		-		418
Total	$	73,301	$	255,967	$	46,726	$	(1,734)	$	(820)	$	373,440
Liabilities:
Policyholder contract deposits	$	-	$	72	$	312	$	-	$	-	$	384
Other policyholder funds		-		-		-		-		-		-
Derivative liabilities:
Interest rate contracts		-		3,661		141		-		-		3,802
Foreign exchange contracts		-		319		-		-		-		319
Equity contracts		-		101		-		-		-		101
Commodity contracts		-		5		-		-		-		5
Credit contracts		-		-		1,335		-		-		1,335
Other contracts		-		25		142		-		-		167
Counterparty netting and cash collateral		-		-		-		(1,734)		(1,484)		(3,218)
Total derivative liabilities		-		4,111		1,618		(1,734)		(1,484)		2,511
Long-term debt		-		6,377		370		-		-		6,747
Other liabilities		42		891		-		-		-		933
Total	$	42	$	11,451	$	2,300	$	(1,734)	$	(1,484)	$	10,575

(a)Represents netting of derivative exposures covered by a qualifying master netting agreement.

(b) Effective April 1, 2014, we reclassified cross-currency swaps from Interest rate contracts to Foreign exchange contracts. This change was applied prospectively.

Changes in Level 3 recurring fair value measurements

				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair Value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair Value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period(a)		in Income		Income (Loss)		Settlements, Net		in		out		of Period		at End of Period
Three Months Ended June 30, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	2,042	$	-	$	74	$	7	$	-	$	(132)	$	1,991	$	-
Non-U.S. governments		17		-		-		4		4		-		25		-
Corporate debt		1,815		9		33		(71)		707		(297)		2,196		-
RMBS		15,764		251		127		67		119		-		16,328		-
CMBS		5,741		17		129		(7)		69		(32)		5,917		-
CDO/ABS		6,610		18		1		726		103		(27)		7,431		-
Total bonds available for sale		31,989		295		364		726		1,002		(488)		33,888		-
Other bond securities:
RMBS		1,069		23		-		(32)		2		-		1,062		2
CMBS		770		21		-		(40)		6		-		757		19
CDO/ABS		8,498		334		-		(436)		1		-		8,397		122
Total other bond securities		10,337		378		-		(508)		9		-		10,216		143
Equity securities available for sale:
Common stock		-		-		-		-		-		-		-		-
Preferred stock		-		-		-		-		-		-		-		-
Total equity securities available for sale		-		-		-		-		-		-		-		-
Mortgage and other loans receivable		-		-		-		6		-		-		6		-
Other invested assets		5,990		8		(5)		(15)		-		(154)		5,824		-
Total	$	48,316	$	681	$	359	$	209	$	1,011	$	(642)	$	49,934	$	143
Liabilities:
Policyholder contract deposits	$	(765)	$	(58)	$	(16)	$	(3)	$	-	$	-	$	(842)	$	(37)
Derivative liabilities, net:
Interest rate contracts		(98)		8		-		23		-		-		(67)		8
Foreign exchange contracts		-		3		-		(12)		-		-		(9)		3
Equity contracts		88		11		-		(8)		-		-		91		11
Commodity contracts		1		-		-		-		-		-		1		-
Credit contracts		(1,185)		75		-		25		-		-		(1,085)		69
Other contracts		(109)		18		48		(10)		-		-		(53)		16
Total derivative liabilities, net		(1,303)		115		48		18		-		-		(1,122)		107
Long-term debt(c)		(403)		(5)		-		14		-		-		(394)		(4)
Total	$	(2,471)	$	52	$	32	$	29	$	-	$	-	$	(2,358)	$	66
				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair Value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair Value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period(a)		in Income		Income (Loss)		Settlements, Net		in		out		of Period		at End of Period
Six Months Ended June 30, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions(b)	$	1,080	$	-	$	191	$	853	$	-	$	(133)	$	1,991	$	-
Non-U.S. governments		16		-		(1)		6		4		-		25		-
Corporate debt		1,255		6		53		(67)		1,355		(406)		2,196		-
RMBS		14,941		495		260		624		119		(111)		16,328		-
CMBS		5,735		23		240		(57)		69		(93)		5,917		-
CDO/ABS		6,974		52		3		734		169		(501)		7,431		-
Total bonds available for sale		30,001		576		746		2,093		1,716		(1,244)		33,888		-
Other bond securities:
RMBS		937		51		-		72		2		-		1,062		17
CMBS		844		38		-		(131)		6		-		757		32
CDO/ABS		8,834		669		-		(887)		1		(220)		8,397		286
Total other bond securities		10,615		758		-		(946)		9		(220)		10,216		335
Equity securities available for sale:
Common stock		1		-		-		-		-		(1)		-		-
Preferred stock		-		-		-		-		-		-		-		-
Total equity securities available for sale		1		-		-		-		-		(1)		-		-
Mortgage and other loans receivable		-		-		-		6		-		-		6		-
Other invested assets		5,930		87		49		34		85		(361)		5,824		-
Total	$	46,547	$	1,421	$	795	$	1,187	$	1,810	$	(1,826)	$	49,934	$	335
Liabilities:
Policyholder contract deposits	$	(312)	$	(532)	$	(24)	$	26	$	-	$	-	$	(842)	$	(120)
Derivative liabilities, net:
Interest rate contracts		(100)		2		-		32		-		(1)		(67)		4
Foreign exchange contracts		-		3		-		(12)		-		-		(9)		4
Equity contracts		49		8		-		(14)		48		-		91		5
Commodity contracts		1		-		-		-		-		-		1		-
Credit contracts		(1,280)		154		-		41		-		-		(1,085)		164
Other contracts		(109)		35		47		(26)		-		-		(53)		27
Total derivative liabilities, net		(1,439)		202		47		21		48		(1)		(1,122)		204
Long-term debt(c)		(370)		(8)		-		33		(70)		21		(394)		5
Total	$	(2,121)	$	(338)	$	23	$	80	$	(22)	$	20	$	(2,358)	$	89

				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period(a)		in Income		Income (Loss)		Settlements, Net		In		Out		of Period		at End of Period
Three Months Ended June 30, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	1,019	$	24	$	(145)	$	69	$	-	$	(22)	$	945	$	-
Non-U.S. governments		18		(1)		-		4		-		(1)		20		-
Corporate debt		1,449		-		(20)		8		256		(59)		1,634		-
RMBS		12,096		204		(144)		1,529		9		-		13,694		-
CMBS		5,315		-		(121)		263		7		(9)		5,455		-
CDO/ABS		5,577		72		(76)		381		198		(10)		6,142		-
Total bonds available for sale		25,474		299		(506)		2,254		470		(101)		27,890		-
Other bond securities:
RMBS		730		(12)		-		64		-		-		782		(12)
CMBS		776		(1)		-		(41)		93		(7)		820		(16)
CDO/ABS		8,842		569		-		(572)		133		-		8,972		336
Total other bond securities		10,348		556		-		(549)		226		(7)		10,574		308
Equity securities available for sale:
Common stock		22		(9)		6		57		-		-		76		-
Preferred stock		49		-		(1)		-		-		-		48		-
Total equity securities available for sale		71		(9)		5		57		-		-		124		-
Other invested assets		5,467		108		23		42		218		(219)		5,639		-
Total	$	41,360	$	954	$	(478)	$	1,804	$	914	$	(327)	$	44,227	$	308
Liabilities:
Policyholder contract deposits	$	(1,047)	$	410	$	-	$	51	$	-	$	-	$	(586)	$	440
Derivative liabilities, net:
Interest rate contracts		756		3		-		20		-		-		779		7
Equity contracts		66		8		-		(6)		2		-		70		5
Commodity contracts		1		-		-		-		-		-		1		-
Credit contracts		(1,775)		138		-		43		-		-		(1,594)		181
Other contracts		(139)		13		8		13		-		-		(105)		9
Total derivatives liabilities, net		(1,091)		162		8		70		2		-		(849)		202
Long-term debt(c)		(407)		(15)		-		3		-		-		(419)		(13)
Total	$	(2,545)	$	557	$	8	$	124	$	2	$	-	$	(1,854)	$	629
				Net												Changes in
				Realized and												Unrealized Gains
				Unrealized				Purchases,								(Losses) Included
		Fair value		Gains (Losses)		Other		Sales,		Gross		Gross		Fair value		in Income on
		Beginning		Included		Comprehensive		Issues and		Transfers		Transfers		End		Instruments Held
(in millions)		of Period(a)		in Income		Income (Loss)		Settlements, Net		In		Out		of Period		at End of Period
Six Months Ended June 30, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities
and political subdivisions	$	1,024	$	25	$	(150)	$	205	$	-	$	(159)	$	945	$	-
Non-U.S. governments		14		-		-		6		1		(1)		20		-
Corporate debt		1,487		(4)		(14)		30		332		(197)		1,634		-
RMBS		11,662		408		339		1,266		19		-		13,694		-
CMBS		5,124		11		20		188		161		(49)		5,455		-
CDO/ABS		4,841		97		-		1,020		379		(195)		6,142		-
Total bonds available for sale		24,152		537		195		2,715		892		(601)		27,890		-
Other bond securities:
RMBS		396		10		-		138		238		-		782		(40)
CMBS		812		11		-		(140)		251		(114)		820		(42)
CDO/ABS		8,536		853		-		(1,009)		620		(28)		8,972		217
Total other bond securities		9,744		874		-		(1,011)		1,109		(142)		10,574		135
Equity securities available for sale:
Common stock		24		-		5		47		-		-		76		-
Preferred stock		44		-		4		-		-		-		48		-
Total equity securities available for sale		68		-		9		47		-		-		124		-
Other invested assets		5,389		169		10		40		344		(313)		5,639		-
Total	$	39,353	$	1,580	$	214	$	1,791	$	2,345	$	(1,056)	$	44,227	$	135
Liabilities:
Policyholder contract deposits	$	(1,257)	$	615	$	-	$	56	$	-	$	-	$	(586)	$	664
Derivative liabilities, net:
Interest rate contracts		732		14		-		33		-		-		779		9
Equity contracts		47		36		-		(14)		1		-		70		27
Commodity contracts		1		-		-		(1)		-		1		1		1
Credit contracts		(1,991)		313		-		84		-		-		(1,594)		396
Other contracts		(162)		21		8		30		(2)		-		(105)		23
Total derivatives liabilities, net		(1,373)		384		8		132		(1)		1		(849)		456
Long-term debt(c)		(344)		(95)		-		22		(2)		-		(419)		(22)
Total	$	(2,974)	$	904	$	8	$	210	$	(3)	$	1	$	(1,854)	$	1,098

(a) Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

(b)Purchases, Sales, Issues and Settlements, Net primarily reflect the effect of consolidating previously unconsolidated securitization vehicles.

(c) Includes guaranteed investment agreements (GIAs), notes, bonds, loans and mortgages payable.

Schedule of net realized and unrealized gains and losses related to Level 3 items

		Net		Net Realized
		Investment		Capital		Other
(in millions)		Income	Gains (Losses)			Income		Total
Three Months Ended June 30, 2014
Bonds available for sale	$	298	$	(15)	$	12	$	295
Other bond securities		49		1		328		378
Equity securities available for sale		-		-		-		-
Other invested assets		12		(9)		5		8
Policyholder contract deposits		-		(58)		-		(58)
Derivative liabilities, net		16		8		91		115
Long-term debt		-		-		(5)		(5)
Three Months Ended June 30, 2013
Bonds available for sale	$	239	$	6	$	54	$	299
Other bond securities		(5)		-		561		556
Equity securities available for sale		-		(9)		-		(9)
Other invested assets		107		(22)		23		108
Policyholder contract deposits		-		410		-		410
Derivative liabilities, net		15		(5)		152		162
Long-term debt		-		-		(15)		(15)
Six Months Ended June 30, 2014
Bonds available for sale	$	602	$	(51)	$	25	$	576
Other bond securities		100		2		656		758
Equity securities available for sale		-		-		-		-
Other invested assets		89		(13)		11		87
Policyholder contract deposits		-		(532)		-		(532)
Derivative liabilities, net		31		5		166		202
Long-term debt		-		-		(8)		(8)
Six Months Ended June 30, 2013
Bonds available for sale	$	449	$	13	$	75	$	537
Other bond securities		28		-		846		874
Equity securities available for sale		-		-		-		-
Other invested assets		154		(28)		43		169
Policyholder contract deposits		-		615		-		615
Derivative liabilities, net		15		17		352		384
Long-term debt		-		-		(95)		(95)

Gross components of purchases, sales, issuances and settlements, net

								Purchases,
								Sales, Issues and
(in millions)		Purchases		Sales		Settlements		Settlements, Net(a)
Three Months Ended June 30, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	48	$	(27)	$	(14)	$	7
Non-U.S. governments		5		-		(1)		4
Corporate debt		63		(1)		(133)		(71)
RMBS		665		(11)		(587)		67
CMBS		27		-		(34)		(7)
CDO/ABS		892		(2)		(164)		726
Total bonds available for sale		1,700		(41)		(933)		726
Other bond securities:
RMBS		21		(14)		(39)		(32)
CMBS		-		-		(40)		(40)
CDO/ABS		23		(8)		(451)		(436)
Total other bond securities		44		(22)		(530)		(508)
Equity securities available for sale		-		-		-		-
Mortgage and other loans receivable		6		-		-		6
Other invested assets		137		(1)		(151)		(15)
Total assets	$	1,887	$	(64)	$	(1,614)	$	209
Liabilities:
Policyholder contract deposits	$	-	$	(46)	$	43	$	(3)
Derivative liabilities, net		-		-		18		18
Long-term debt(c)		-		-		14		14
Total liabilities	$	-	$	(46)	$	75	$	29
Three Months Ended June 30, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	150	$	(81)	$	-	$	69
Non-U.S. governments		5		-		(1)		4
Corporate debt		211		(114)		(89)		8
RMBS		2,110		-		(581)		1,529
CMBS		320		(18)		(39)		263
CDO/ABS		673		-		(292)		381
Total bonds available for sale		3,469		(213)		(1,002)		2,254
Other bond securities:
RMBS		108		-		(44)		64
CMBS		-		-		(41)		(41)
CDO/ABS		129		-		(701)		(572)
Total other bond securities		237		-		(786)		(549)
Equity securities available for sale		58		(1)		-		57
Other invested assets		205		(16)		(147)		42
Total assets	$	3,969	$	(230)	$	(1,935)	$	1,804
Liabilities:
Policyholder contract deposits	$	-	$	(6)	$	57	$	51
Derivative liabilities, net		2		3		65		70
Long-term debt(c)		-		-		3		3
Total liabilities	$	2	$	(3)	$	125	$	124
								Purchases,
								Sales, Issues and
(in millions)		Purchases		Sales		Settlements		Settlements, Net(a)
Six Months Ended June 30, 2014
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions(b)	$	936	$	(32)	$	(51)	$	853
Non-U.S. governments		7		-		(1)		6
Corporate debt		119		(8)		(178)		(67)
RMBS		1,752		(26)		(1,102)		624
CMBS		92		(57)		(92)		(57)
CDO/ABS		1,222		(2)		(486)		734
Total bonds available for sale		4,128		(125)		(1,910)		2,093
Other bond securities:
RMBS		162		(19)		(71)		72
CMBS		-		(6)		(125)		(131)
CDO/ABS		44		(15)		(916)		(887)
Total other bond securities		206		(40)		(1,112)		(946)
Equity securities available for sale		-		-		-		-
Mortgage and other loans receivable		6		-		-		6
Other invested assets		433		(1)		(398)		34
Total assets	$	4,773	$	(166)	$	(3,420)	$	1,187
Liabilities:
Policyholder contract deposits	$	-	$	(58)	$	84	$	26
Derivative liabilities, net		1		-		20		21
Long-term debt(c)		-		-		33		33
Total liabilities	$	1	$	(58)	$	137	$	80
Six Months Ended June 30, 2013
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	308	$	(103)	$	-	$	205
Non-U.S. governments		8		-		(2)		6
Corporate debt		308		(114)		(164)		30
RMBS		2,712		(231)		(1,215)		1,266
CMBS		693		(164)		(341)		188
CDO/ABS		1,471		(159)		(292)		1,020
Total bonds available for sale		5,500		(771)		(2,014)		2,715
Other bond securities:
RMBS		213		-		(75)		138
CMBS		19		(58)		(101)		(140)
CDO/ABS		318		-		(1,327)		(1,009)
Total other bond securities		550		(58)		(1,503)		(1,011)
Equity securities available for sale		59		(11)		(1)		47
Other invested assets		448		(46)		(362)		40
Total assets	$	6,557	$	(886)	$	(3,880)	$	1,791
Liabilities:
Policyholder contract deposits	$	-	$	(12)	$	68	$	56
Derivative liabilities, net		5		(1)		128		132
Long-term debt(c)		-		-		22		22
Total liabilities	$	5	$	(13)	$	218	$	210

(a)There were no issuances during thethree- and six-month periods ended June 30,2014 and 2013.

(b) Purchases primarily reflect the effect of consolidating previously unconsolidated securitization vehicles.

(c)Includes GIAs, notes, bonds, loans and mortgages payable.

Significant unobservable inputs used for recurring fair value measurements

	Fair Value  at
	June 30,		Valuation		Range
(in millions)	2014		Technique	Unobservable Input	(Weighted Average )
Assets:
Obligations of states,	$	1,099	Discounted cash flow	Yield(b)	4.14% - 4.90% (4.52%)
municipalities and
political subdivisions
Corporate debt		1,365	Discounted cash flow	Yield(b)	0.00% - 7.99% (5.69%)
RMBS		16,844	Discounted cash flow	Constant prepayment rate(a)(c)	0.20% - 9.91% (5.05%)
				Loss severity(a)(c)	44.22% - 79.45% (61.83%)
				Constant default rate(a)(c)	3.90% - 11.11% (7.50%)
				Yield(c)	2.51% - 6.61% (4.56%)
Certain CDO/ABS		5,364	Discounted cash flow	Constant prepayment rate(a)(c)	6.10% - 11.30% (9.00%)
				Loss severity(a)(c)	46.20% - 60.90% (54.00%)
				Constant default rate(a)(c)	2.80% - 15.30% (8.40%)
				Yield(c)	4.90% - 10.40% (8.40%)
CMBS		6,142	Discounted cash flow	Yield(b)	0.00% - 13.53% (4.52%)
CDO/ABS - Direct			Binomial Expansion	Recovery rate(b)	6.00% - 59.00% (24.00%)
Investment book		568	Technique (BET)	Diversity score(b)	6 - 30 (15.3)
				Weighted average life(b)	0.54 - 11.20 years (5.22 years)
Liabilities:
Policyholder contract
deposits		842	Discounted cash flow	Equity implied volatility(b)	6.00% - 39.00%
				Base lapse rate(b)	1.00% - 40.00%
				Dynamic lapse rate(b)	0.20% - 60.00%
				Mortality rate(b)	0.50% - 40.00%
				Utilization rate(b)	0.50% - 25.00%
Total derivative
liabilities, net		853	BET	Recovery rate(b)	6.00% - 32.00% (17.00%)
				Diversity score(b)	9 - 31 (14)
				Weighted average life(b)	3.82 - 11.20 years (6.16 years)

		Fair Value  at
		December 31,	Valuation		Range
(in millions)		2013	Technique	Unobservable Input	(Weighted Average )
Assets:
Obligations of states,	$	920	Discounted cash flow	Yield(b)	4.94% - 5.86% (5.40%)
municipalities and
political subdivisions
Corporate debt		788	Discounted cash flow	Yield(b)	0.00% - 14.29% (6.64%)
RMBS		14,419	Discounted cash flow	Constant prepayment rate(a)(c)	0.00% - 10.35% (4.97%)
				Loss severity(a)(c)	42.60% - 79.07% (60.84%)
				Constant default rate(a)(c)	3.98% - 12.22% (8.10%)
				Yield(c)	2.54% - 7.40% (4.97%)
Certain CDO/ABS		5,414	Discounted cash flow	Constant prepayment rate(a)(c)	5.20% - 10.80% (8.20%)
				Loss severity(a)(c)	48.60% - 63.40% (56.40%)
				Constant default rate(a)(c)	3.20% - 16.20% (9.00%)
				Yield(c)	5.20% - 11.50% (9.40%)
CMBS		5,847	Discounted cash flow	Yield(b)	0.00% - 14.69% (5.58%)
CDO/ABS - Direct			Binomial Expansion	Recovery rate(b)	6.00% - 63.00% (25.00%)
Investment book		557	Technique (BET)	Diversity score(b)	5 - 35 (12)
				Weighted average life(b)	1.07 - 9.47 years (4.86 years)
Liabilities:
Policyholder contract
deposits		312	Discounted cash flow	Equity implied volatility(b)	6.00% - 39.00%
				Base lapse rate(b)	1.00% - 40.00%
				Dynamic lapse rate(b)	0.20% - 60.00%
				Mortality rate(b)	0.50% - 40.00%
				Utilization rate(b)	0.50% - 25.00%
Total derivative
liabilities, net		996	BET	Recovery rate(b)	5.00% - 34.00% (17.00%)
				Diversity score(b)	9 - 32 (13)
				Weighted average life(b)	4.50 - 9.47 years (5.63 years)

(a)The unobservable inputs and ranges for the constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CDO securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by us because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points.

(b) Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities.

(c) Information received from independent third-party valuation service providers.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

		June 30, 2014				December 31, 2013
			Fair Value Using Net Asset Value Per Share (or its equivalent)				Fair Value Using Net Asset Value Per Share (or its equivalent)
					Unfunded				Unfunded
(in millions)	Investment Category Includes				Commitments				Commitments
Investment Category
Private equity funds:
Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	2,462	$	480	$	2,544	$	578
Real Estate / Infrastructure	Investments in real estate properties and infrastructure positions, including power plants and other energy generating facilities		396		266		346		86
Venture capital	Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company		141		10		140		13
Distressed	Securities of companies that are in default, under bankruptcy protection, or troubled		168		46		183		34
Other	Includes multi-strategy and mezzanine strategies		174		234		134		238
Total private equity funds			3,341		1,036		3,347		949
Hedge funds:
Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		1,229		2		976		2
Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		1,962		4		1,759		11
Macro	Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions		479		-		612		-
Distressed	Securities of companies that are in default, under bankruptcy protection or troubled		645		22		594		15
Emerging markets	Investments in the financial markets of developing countries		302		-		287		-
Other	Includes multi-strategy and relative value strategies		169		-		157		-
Total hedge funds			4,786		28		4,385		28
Total		$	8,127	$	1,064	$	7,732	$	977

Gains or losses related to the eligible instruments for which AIG elected the fair value option

	Gain (Loss) Three Months Ended June 30,				Gain (Loss) Six Months Ended June 30,
(in millions)		2014		2013		2014		2013
Assets:
Mortgage and other loans receivable	$	-	$	1	$	-	$	2
Bond and equity securities		611		256		1,277		632
Alternative Investments(a)		18		122		172		206
Other, including Short-term investments		2		2		5		5
Liabilities:
Long-term debt(b)		(135)		313		(209)		322
Other liabilities		(2)		(2)		(6)		(6)
Total gain	$	494	$	692	$	1,239	$	1,161

(a)Includes hedge funds, private equity funds and other investment partnerships.

(b)Includes GIAs, notes, bonds, loans and mortgages payable.

Difference between fair values and aggregate contractual principal amounts, fair value option

	June 30, 2014						December 31, 2013
			Outstanding						Outstanding
(in millions)	Fair Value		Principal Amount		Difference		Fair Value		Principal Amount		Difference
Assets:
Mortgage and other loans receivable	$	6	$	4	$	2	$	-	$	-	$	-
Liabilities:
Long-term debt*	$	5,824	$	4,393	$	1,431	$	6,747	$	5,231	$	1,516

* Includes GIAs, notes, bonds, loans and mortgages payable.

Fair value assets measured on nonrecurring basis and impairment charges

	Assets at Fair Value								Impairment Charges
	Non-Recurring Basis								Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	Level 1		Level 2		Level 3			Total		2014		2013		2014		2013
June 30, 2014
Other investments	$	-	$	-	$	1,445	$	1,445	$	20	$	36	$	55	$	72
Investments in life settlements		-		-		399		399		45		35		87		78
Other assets		-		-		-		-		-		11		1		24
Total	$	-	$	-	$	1,844	$	1,844	$	65	$	82	$	143	$	174
December 31, 2013
Other investments	$	-	$	-	$	1,615	$	1,615
Investments in life settlements		-		-		896		896
Other assets		-		11		48		59
Total	$	-	$	11	$	2,559	$	2,570

Carrying value and estimated fair value of AIG's financial instruments

	Estimated Fair Value									Carrying
(in millions)		Level 1		Level 2		Level 3		Total		Value
June 30, 2014
Assets:
Mortgage and other loans receivable	$	-	$	219	$	23,598	$	23,817	$	22,931
Other invested assets		-		600		2,809		3,409		4,337
Short-term investments		-		16,578		-		16,578		16,578
Cash		1,827		-		-		1,827		1,827
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		211		117,328		117,539		105,131
Other liabilities		-		3,993		-		3,993		3,993
Long-term debt		-		33,665		3,538		37,203		32,590
December 31, 2013
Assets:
Mortgage and other loans receivable	$	-	$	219	$	21,418	$	21,637	$	20,765
Other invested assets		-		529		2,705		3,234		4,194
Short-term investments		-		15,304		-		15,304		15,304
Cash		2,241		-		-		2,241		2,241
Liabilities:
Policyholder contract deposits associated
with investment-type contracts		-		199		114,361		114,560		105,093
Other liabilities		-		4,869		1		4,870		4,869
Long-term debt		-		36,239		2,394		38,633		34,946